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Kingstons appear to be cooperating with feds as fraud trial for last defendant is delayed

Posted at 1:29 PM, Sep 03, 2019
and last updated 2019-09-04 12:20:47-04

SALT LAKE CITY — Washakie Renewable Energy CEO Jacob Kingston and his brother, Isaiah, have apparently been cooperating with federal authorities going after the final defendant in the fraud case.

During a hearing Tuesday in U.S. District Court for Lev Dermen, Judge Jill Parrish brought up the government’s interviews with the Kingston brothers when asking prosecutors about providing evidence to the defense.

“Have you finished providing all of the information you obtained from Isaiah Kingston, Jacob Kingston, the burner phones, the memoranda, the debriefing — has all of that been turned over to Mr. Geragos? That seems to me a game changer and he’s got to have that,” she said, referring to Dermen’s attorney, Mark Geragos.

“The short answer is yes,” assistant United States Attorney Arthur Ewenczyk told her, later suggesting that the government has had multiple conversations with Jacob and Isaiah Kingston.

Geragos complained that evidence has not been quickly turned over, creating problems as he prepares to mount a defense for Dermen. Geragos argued that with the guilty pleas of the Kingston brothers, as well as Jacob’s wife, Sally; and mother, Rachel; the entire nature of the government’s case against Dermen had changed dramatically.

Ewenczyk told the judge that the basics of the case remains the same, but conceded there was new information after the guilty pleas that added to the conspiracies they are alleging took place.

The Kingstons pleaded guilty in July in connection with a massive fraud scheme involving Washakie Renewable Energy. The Internal Revenue Service accuses them of running a billion dollar scheme to bilk the government out of renewable fuel tax credits, and the company produced little if any biofuels. It stems from a 2016 raid on properties linked to the Kingston family, who are members of one of Utah’s largest polygamous groups.

Washakie Renewable Energy was a big political contributor and a heavy advertiser in Utah.

In court documents, government lawyers claim that Dermen — a Turkish businessman who had some dealings with Jacob Kingston — also offered them “protection” from criminal prosecution and claimed to be linked to a number of law enforcement officials accused of corruption. The court filings claim Dermen also threatened and assaulted Jacob Kingston.

Federal prosecutors have said the Kingstons had business interests in Turkey. Photos published by Turkish news media showed Jacob Kingston meeting with President Recep Tayyip Erdoğan, pitching investments in that country. The feds have also accused the Kingstons of stashing millions in bank accounts in Turkey and planning to flee there to avoid prosecution.

Judge Parrish agreed to delay Dermen’s trial until mid-October to give him more time to prepare, but she warned she was not going to grant further delays.

“I think i’ve been incredibly reasonable to this point and I’m just at the point where we need to set a deadline and abide by it,” the judge said.

Geragos expressed concerns that evidence might be provided at the last minute, particularly when it came to witnesses who would testify against Dermen.

“I don’t understand what the problem is. If they’ve got it, turn it over,” he said.

The feds offered to provide what they could, but would not promise to provide it earlier than necessary.

“As this court is aware, there is witness security concerns,” said assistant U.S. Attorney Richard Rolwing.